New research suggests that digital wealth management for ultra high net worth investors is crucial but still at a "very immature stage".

Wealth managers need a strong set of digital capabilities aimed specifically at super-rich investors in the increasingly fierce battle for clients in this segment, according to a report launched today.

MyPrivateBanking Research analysed the UHNW-focused digital offerings of 12 global wealth managers: Atlantic Trust, Bessemer Trust, BNY Mellon, Citi Private Bank, Goldman Sachs, Hawthorn, HSBC Private Bank, Northern Trust, Pictet, Stonehage Fleming, US Trust and UBS.

For the purpose of the study – entitled Digital offerings for UHNW clients - Best practices and learnings on how wealth managers can win and engage the ultra-wealthy online – the Swiss firm defined “UHNWIs” as those with at least $30 million in investable assets.

With much variation between firms, it crowned Northern Trust Wealth Management, Citi Private Bank and US Trust as the leading digital providers in the UHNW space.

“Northern Trust WM especially stands out, as they are leading our evaluation in each of the three core themes: digital strategy and organization, technology adoption and touchpoints, and targeted UHNW capabilities,” Emma Haffenden, a senior analyst at MyPrivateBanking Research, told this publication. “They seem to have been ahead of the curve for a while, with their mature ‘Private Passport’ offering.”

Citi Private Bank, meanwhile, has “adopted digital as a core part of their client experience strategy,” Haffenden said. “This is evident from the high level of importance executives place on it as a collaboration tool hence their strength is also from the functional detail in their platform, being aimed solely at UHNWIs.”

US Trust – one of the oldest institutions – demonstrates a “very responsive approach”, particularly in terms of digital marketing and content on social media, she added. “They seem to have adapted well to presenting their business and their insights online as well as having some excellent tools such as their next-gen program.”

Among the main findings of the study was that none of the firms surveyed offer UHNW clients an instant and private communication channel via social media or through their website. Additionally, while digital material on important topics such as succession planning was “generally offered”, few firms provide a communication platform or program focused on financial literacy or investing education with a digital/online element. Exclusive contact and assistance options emerged as the weakest function, with firms scoring just 8 per cent on average. The highest scoring function, at 69 per cent on average, was simply for the prominence of online services, including a permanent website login to offer clients quick access and evidence that online services are part of the firm’s offering.

Recommendations

The digital leaders in the UHNW space were chosen by MyPrivateBanking after an evaluation of over 25 criteria describing performance and potential features, which were divided into nine categories. Accordingly, the report outlines how wealth managers can effectively engage UHNWIs online, with the ultimate goal of turning prospects into clients.

First, it said high-profile representatives of the business such as the CIO should “visibly champion digital media” while spreading the firm’s “core messages” via social media and its online platforms. It stressed that the availability of an exclusive UHNW mobile app is an “essential element” of this approach - and at the very least should provide market insights, portfolio analysis tools and trading functions.

Second, the report emphasizes that digestible thought leadership and research is essential for encouraging clients to establish a habit of consulting their wealth manager regarding life events, as well as to quench their curiosity for market news and relevant economic insights. “As all clients will have their preferred channels for reading articles/watching video, it is important that content is distributed consistently across the website, mobile app and social media platforms,” it added.

Additionally, online communication features can be boosted with “VIP service levels in mind” by, for example, allowing prospective clients to “act in the moment” and send a private enquiry. Finally, as MyPrivateBanking believes that technology will become even more of a differentiator for the UHNW segment – indeed across all industries serving them – the use of artificial intelligence, augmented reality, advanced security and behavioral experiences should also be explored.

“It is a myth that UHNW individuals don’t use technology,” Haffenden said. “In fact, UHNWIs are some of the most prolific users and investors in technology and even social media has a 70 per cent penetration into this segment.”

Asked by this publication what could be causing the perceived misconception that UHNWIs don't use technology, she said: “I think this is a case of conscious stoicism by the front office in the face of mainstream behaviors, use of smartphones for example, a conservative belief that the UHNW are too unique to have their needs met in the same way as the masses.

“But of course wealthy people do not exist in a bubble and they are inquisitive if they think that clients lower down the wealth spectrum are being served better in some specific aspects. During one of our research interviews with the director of UHNW at a leading global wealth manager, the banker described his clients as being ‘robo-curious’, highlighting how UHNW are participating in new trends and as we state in our report digital is, for the moment, ‘a cross-segment, cross-generational leveler’. We believe it will become a differentiator, therefore many firms will be caught out.”